World Bank Policies and labour rights

There are a lot of heated discussions on the World Bank.
However, there is, as I understand, no argument about the fact that
the World Bank is promoting deregulation, liberalisation,
privatisation, the free movement of capital, so-called free trade
and labour flexibility. Actually, the Bank is not only promoting
this policy, it demands countries to pursue this kind of policies
as conditionalities for receiving loans. The disagreement is about
whether or not this policy benefits workers and society as a whole.
This will be the main focus of my contribution.

The struggle for trade union and labour rights is, of course,
decisive if we are to develop a civilised society. However, in
order to achieve better labour standards, we will have to analyse
why trade union rights are being undermined and why we experience a
brutalisation of work in most parts of the world today. Which are
the driving forces behind the attacks on trade union rights and
labour standards? There are causes and effects, and we will have to
identify and attack the causes if we are going to improve working
conditions and by that, the quality of life for working people.

A great part of the international trade union movement, the
International Labour Organisation (ILO) and many of the governments
of the North are demanding minimum labour standards in
international agreements and as an integrated part of the policies
of the international financial institutions. Minimum standards are
concretely defined as a collection of ILO Conventions – regarding
the right for workers to organise and to bargain, ban on child and
forced labour and on discrimination based on gender – in other
words very basic rules and rights.

The international trade union movement has actually invested a
lot of resources and energy in campaigning for these demands, not
only in relation to the World Bank, but also the International
Monetary Fund (IMF) and the World Trade Organisation (WTO). The
results have so far been scarce. In fact, according to annual
reports from the ILO as well as from the International
Confederation of Free Trade Unions (ICFTU) over the last 10-15
years, violations of trade union and labour rights have been

Even in the developed world, trade union and labour rights are
being weakened and undermined these days – and this is not
happening because there is a lack of formal labour standards. It is
happening in spite of relatively strict labour laws and
regulations. A serious brutalisation of work is going on in most of
the developed world. Physical and in particular mental pressure and
stress are increasing phenomena at work, and a rapidly growing
number of workers are being expelled from the labour market
altogether. Here in Norway, almost 15 per cent of the total
population between the ages of 16 and 67 – the latter being the age
of retirement – are now on early retirement, disablement benefit or
some kind of rehabilitation. The figure has doubled over the last
20 years.

So why do we experience this rather dramatic development in the
labour market in a country which is wealthier than most other
countries in this world, and wealthier than at any time previously
in its history? It is not a lack of labour standards, laws and
regulations. Norway has probably one of the best labour regulations
in the world. The fact is that the laws and agreements which
regulate the Norwegian labour market, are being violated and
undermined in practice at workplaces every day. Working conditions
and labour rights are, in other words, not primarily an effect of
formal labour standards. How is it, then, that we can improve
working conditions and labour and trade union rights?

Let me go 100 years or so back in history, to the end of the 19
century. That was the time when workers started to organise in
Norway – in trade unions and in political parties. Working
conditions were miserable and there were no labour regulations.
However, by means of trade union and political struggle, labour and
trade union rights were gradually improved and were formally
institutionalised through labour laws and through agreements
between trade unions and employers. What took place was a gradual
shift of the balance of forces between labour and capital – in
favour of labour. Labour market regulation was introduced and
enforced as a result of the increasing power of organised

However, the strength of labour was not only reflected in labour
laws and regulations. Probably more important was the general
taming of market forces. The power of capital was reduced in favour
of politically elected bodies. Competition was dampened through
political interventions in the market. Capital control was
introduced and financial capital was strictly regulated. Through a
strong expansion of the public sector and the welfare state, a
great part of the economy was taken out of the market altogether
and made subject to political decisions. A considerable reduction
of the physical and mental pressure on workers was an important
consequence of this development.

It culminated in the 1970s. For reasons on which I am not going
to elaborate further in this contribution, the labour movement lost
momentum, capitalist forces went on the offensive and the current
era of neoliberalism started. What we have been facing over the
last twenty years, is the abolition of capital control and fixed
exchange rates, the deregulation and liberalisation of markets, the
privatisation of public services, the increased use of competitive
tendering and outsourcing, the downsizing of the workforce to the
absolute minimum, and the consequent increasing labour intensity,
and the flexibilisation of labour. In short, an immense shift in
the balance of forces between labour and capital has taken place,
and this time in favour of capital. This is the main reason for the
brutalisation of work and the undermining of trade union and labour
rights that we are now facing in the developed as well as in the
developing world. It is first and foremost a question of power, and
it cannot be changed only by formally introducing labour

A couple of months ago, my organisation, the Campaign for the
Welfare State, held a huge conference in Oslo on the ongoing
brutalisation of work. At that conference, Professor Michael
Quinlan of the University of New South Wales in Australia gave an
important speech, in which he reported his findings from a detailed
investigation of more than 150 studies of health and safety effects
of precarious work, or work as it is being influenced by neoliberal
labour market reforms. His conclusion was overwhelmingly clear.
More contingent work and more flexible work, as promoted under
neoliberalism, proved to have adverse effects on health and

So what does all this have to do with the World Bank? Well, the
neoliberal policy which has contributed so strongly to the
brutalisation of work and to the attacks on labour rights, is also
the policy of the World Bank. It is, actually, as simple as

In response to its critiques, the World Bank insists that it has
now strengthened its dialogue with the international trade union
movement – and that is true. It also insists that consultation with
trade unions at the national level is the order of the day when
introducing new projects – and I have no reason to doubt that this
is true. Finally, it insists that it supports the ILO core labour
standards. Even though the trade union movement claims that this
can hardly be seen in practice, let us be big-hearted and accept
the Bank’s insistence.

Then, what is the problem? The problem is that all these
so-called pro-labour policies only become cosmetic changes on the
surface while the Bank, through its neoliberal policy, strengthen
those economic interests in society which are the driving forces
behind the brutalisation of work and the undermining of labour and
trade union rights. I often use the following picture to illustrate
this problem. To liberalise and deregulate the markets and then
think that you can protect the workers by introducing formal labour
standards, is like opening the floodgates of the regulated
waterfall and then forbid the water to fall. Truly, it is not a
very productive exercise.

In other words, The World Bank alleged intentions regarding
labour standards and trade union rights, become impossible or
contradictory. The World Bank’s aims and the World Bank’s means do
not simply fit together – and labour rights are on the loosing
side. Good intentions, I am sorry to say, represent too little
power when they crash with the economic iron laws of market

This also leeds me to some self-criticism on behalf of the
international trade union movement, in which I have been a bit
involved over the last 10 years. The narrow focus on the demand of
formal labour standards in WTO agreements and in World Bank and IMF
conditionalities seems to be based on the conception that formal
rules themselves will improve working conditions. Very often we can
hear international trade union leaders say that they cannot accept
a further liberalisation of this or that unless they get labour
standards included. This is an illusion, it is wrong and it is
dangerous. It contributes to leading the struggle astray, and the
result will be a further deterioration of working conditions.

If the trade union movement of the North really wants to support
trade union and labour rights in the South, we should rather
struggle to limit the power of our own multinational companies and
to regain the control of financial capital. If successful, this
will have much more positive effects on working conditions and
labour rights than the so far very unproductive and narrowly run
campaign and bureaucratic dialogue for formal labour standards.

Do not misunderstand me, the struggle for labour standards, for
trade union and labour rights is of course important – not only
important, it is decisive – but only as a part of a real struggle –
a struggle to empower workers and to strengthen trade unions, a
struggle which is aimed at shifting the balance of forces between
labour and capital. That means fighting market liberalism, not
accepting it in exchange for formal minimum labour standards.

Market liberalism is a health hazard and a threat against trade
union and labour rights – and the World Bank neoliberal policy is
not a part of the solution. It is a part of the problem.

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